Pacific Group performing well for Coca-Cola

May 15, 2009
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by Eric Schroeder

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NEW YORK — Five years ago, the Pacific Group was dragging the results of the Coca-Cola Co. Today, it’s a significant contributor, providing 17% of global volume and 22% of operating income for the Atlanta-based company.

In a May 14 presentation at the Goldman Sachs Consumer Products Conference in New York, Glenn Jordan, president of the Pacific Group for Coca-Cola, elaborated on the growth and long-term opportunities for the region, which includes China, Japan, the Philippines, Thailand and Australia, among others.

"We are still at the very early stages of developing the industry and capturing growth," he said. "If we look at what our 2 billion consumers drink every day in non-alcoholic ready-to-drinks, they’re only 34% of the total consumption. And from this, the Coca-Cola system, although the leader in the Pacific, has an overall market share of just 20%. When you put these two together, it brings our share of the commercial beverage consumed in Asia to 7%, and a white space of more than 90% for us to compete and capture."

As economies in the Pacific Group develop, Mr. Jordan said it will be important for Coca-Cola to "not just ride the wave of prosperity, but to change the habits, moving people from non-commercial to commercial beverages, and within commercial to move them to our core categories."

In the early 2000s, the Pacific Group region’s volume grew at around 3% a year, but that level bumped up to 8% last year. Mr. Jordan said the increase has been driven by stepped-up marketing investments as well as accelerated product and package innovation.

That product innovation includes Coke Zero, which launched in Australia in 2006 and now is sold in 24 countries, as well as Fanta Furu Furu, which debuted in Japan in 2008 and helped Coke grow the Fanta brand 13% in Japan, Mr. Jordan said. He noted that Fanta Furu Furu is rolling out to Korea, Taiwan and other similar operations.

A third product, Minute Maid Pulpy Orange, didn’t exist three years ago, but Mr. Jordan called it a "true sunshine story for our group." Developed for Chinese consumers, the product has become "a runaway success," Mr. Jordan said, with strong double-digit growth every quarter since its launch. In 2008, the product surpassed 150 million cases, and Coca-Cola has rolled it out in many countries within the Pacific Group.

China, in general, has been one of Coca-Cola’s fastest growing markets, he said.

"We have been recording strong double-digit growth in China for 23 consecutive quarters," Mr. Jordan said. "Last year, we grew our business 19%. We sold around 1.6 billion cases last year. It’s our biggest global market for Sprite and second-biggest for Minute Maid."

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